The London UK-based company also announced the conditional acquisition of Movilisto SA, a provider of premium SMS services in Spain and Portugal, for a maximum of 60m euros ($64.2m), to be paid via a combination of cash and the issue of shares.

Under the terms of the agreement, iTouch will provide an initial payment of up to 35m euros ($37.4m) for Movilisto, of which 20m euros ($21.4m) will be satisfied by the issue of shares, and 5m euros ($5.3m) in cash at completion. An additional 10m euros ($10.7m) in cash will be payable, subject to the level of working capital held by Movilisto at completion. Up to a further 25m euros ($26.7m) will be paid in a combination of cash and ordinary shares in the event that Movilisto achieves certain financial targets in the 24-month period following completion of the merger.

The acquisition is intended to expand the company’s geographical footprint in Europe, and provide it with a financially healthy company that will help its own drive to profitability. In its financial year to December 31, Movilisto reported a profit before tax of 12.6m euros ($13.5m), on revenue of 30.8m euros ($32.9m). At the time of the announcement, its net assets were estimated to be 5.9m euros ($6.3m). The acquisition is conditional upon approval of iTouch shareholders at the EGM in May.

Meanwhile, iTouch has posted a healthy set of results, showing a large rise in revenue, as well as a reduced loss. For the fourth quarter, it reported a net loss (before exceptionals) of 3.7m pounds ($5.8m), down from 4.2m pounds ($6.6m), on revenue up 93% at 9.7m pounds ($15.2m), from 5m pounds ($7.8m) in the year-ago quarter.

For the year to December 31, iTouch reported a net loss of 16.2m pounds ($25.4m) from 16.8m pounds ($26.4m) last time, on revenue that rose 124% to 33.6m pounds ($52.7m) from 15m pounds ($23.5m) in 2001. During the year, it posted a hefty 30m pounds ($47.2m) write-down to slash the value of the companies it acquired during the technology boom years.

The company has a healthy cash position, with 24.5m pounds ($38.5m) in the bank as of December 31. This is down from the 36.1m pounds ($56.8m) it had in 2001.

Looking forward, it acknowledged the tough trading conditions for value-added mobile services, but said it will be able to record a modest rise in revenue in 2003. It said revenue to date for the existing business this year has been in line with expectations, and it expects quarterly revenues to increase.

Source: Computerwire